Ohio budget: Tax relief, abortion and then some

It’s safe to say fewer people have read the massive 2014-15 budget for the state of Ohio than will feel its effects.

The $62 billion spending plan outlines how the Buckeye State’s resources will be allocated over the next two fiscal years and how that money will be collected. The bill, which Gov. John Kasich signed into law on June 30, also touches on a number of other areas, the most controversial of which is abortion.

Local residents and officials, still trying to sort out what the budget means to them, recently offered their thoughts on several provisions.

Taxes

Dubbed the “Jobs 2.0” budget by the administration, the compromise bill approved by most Republicans in the Ohio Senate and House of Representatives and opposed by Democrats is expected to deliver $2.7 billion in tax cuts. That comes largely from a gradual reduction of the state income tax and a 50 percent cut on the first $250,000 in net business income, the latter aimed at small businesses.

“Any kind of business tax reduction is only going to help,” said Dave Schramm, owner of the Workingman’s Store in Marietta.

But that tax relief doesn’t come without increases elsewhere to make up for the lost revenue. The new budget raises the sales tax from 5.5 percent to 5.75 percent, something Schramm is not happy to see, but which he prefers to seeing income taxes rise.

“As most people, I would (like) to have everything and not have a tax increase,” he said.

Some residents said the tax changes likely won’t have much of an impact on them.

“Sounds like it pretty much balances itself out, so that’s not really an issue for me,” said Matt Miller, 39, of Marietta.

Devola resident Margaret Lazer, 45, said the income tax might provide a psychological boost, but that could wear off when people notice higher bills as they shop. Most people probably don’t make enough to see a big difference in their income taxes anyway, she said.

“It sounds like a zero-sum game to me,” she said.

Levies

As another revenue-saver, the budget eliminates the 12.5 percent state rollback on new local property tax levies.

Since the 1970s, the state has covered $12.50 for every $100 owed on residential property for school, library and other local levies. But for any new or replacement levies going into effect in 2014, residents will be responsible for all of that cost, as commercial property owners have been for about a decade, said Washington County Auditor Bill McFarland.

The change will not apply to existing levies and ones that are renewed for the same amounts.

That may cause the Muskingum Township trustees to revisit a pair of levies expected to be on the November ballot – one for the eastern part of the township and the Devola Volunteer Fire Company and the other for the west and Oak Grove Volunteer Fire Department.

Township Trustee John Karas said the levies should remain at pretty much the same levels as the current ones – 2.5 mills for Devola, 4 mills for Oak Grove – but due to technical reasons they have been classified as replacements and therefore might not be eligible for the rollback.

“We still have time before we actually would need to put that on the ballot,” Karas said.

Lazer said whether the rollback continues would not affect how she votes on the levy.

“I understand people feeling that they’re getting nickeled and dimed, but my feeling is if we live in a community” everybody should support the services from which they benefit, she said.

The rollback also won’t make a difference to Muskingum Township resident Brian Barnhart, 49.

“I don’t think the state should pay it, and I don’t think we should pay it,” he said, adding that the economy is still in bad shape. “The state gets their money from us.”

The elimination of the rollback would also affect new levies being proposed by the Frontier Local and Switzerland of Ohio Local school districts.

“The governor didn’t do anybody any favors by (signing) that,” Frontier Superintendent Bruce Kidder said. “He just raised property taxes on everybody. … Any time the number goes up, there’s more of a resistance.”

State Sen. Bill Seitz, R-Cincinnati, told the Associated Press that most people didn’t realize the state paid the rollback and wouldn’t notice if it stopped. Jim Lynch, a spokesman for the Office of Budget and Management, said the rollback didn’t provide relief but simply caused all Ohioans to be taxed more.

Local funding

Some legislators and the Ohio County Auditors and County Commissioners associations wanted the budget to return money from the state’s swelling rainy day fund to the Local Government Fund, to partially make up for large cuts to the fund in recent years. The new budget doesn’t cut the fund, but leaves it virtually flat.

“It would be nice to have more money come back locally, but since it hasn’t been in the past, we haven’t really lost anything,” said Julie Rinard, 43, of Marietta.

Karas said Muskingum Township has had to adapt as funding from the state has decreased.

“We have quit paying … for health insurance. We have seen a decline in the use of blacktop or asphalt. We’re doing less chipping and sealing on our roads. We have not given our (two full-time) workers a raise,” he said.

The townships received some additional money when county commissioners increased the amount of the 1 percent permissive sales tax allocated to them, Karas said. But for the most part, Muskingum Township isn’t able to do anything but maintain current operations.

“And we’re losing ground maintaining,” he said.

Jim Lynch, with the Office of Budget and Management, noted the Local Government Fund accounts for only about 2.5 percent of the total state support to local government and schools.

“In many communities, local property tax revenues that help fund schools and local government are well above the levels from when Gov. Kasich took office,” he said in an email this week. “Ohio’s growing economy is bring additional revenues to Ohio communities.”

Abortion

Perhaps the most resistance to the budget bill has been directed at a series of abortion provisions inserted in the final compromise version of the bill.

They include a requirement that abortion providers inform women seeking the procedure if a fetal heartbeat is present and a prohibition against doctors performing an abortion without determining the presence of a fetal heartbeat except in a medical emergency, while also redefining what constitutes such an emergency. Another portion prohibits clinics that provide abortions from having a transfer agreement with publicly funded hospitals, even though such an agreement is needed to stay open.

“This was snuck in at the 11th hour, no hearings, no debate,” said Lowell resident Jim Rapp, 55. “This was like the biggest slap to democracy that we’ve had in our country in a long time.”

Senate President Keith Faber, R-Celina, has defended the additions, saying amendments always come up when bills are being reconciled.

“This was no different than what’s happened in conference committees from the beginning of time,” Faber said.

Marietta resident Carol Hanel, 29, said she didn’t have a problem with the fetal heartbeat measure being included.

“I don’t believe in abortion, so I think that’s a good thing,” she said.

Nursing homes, Medicaid

Two of Kasich’s 22 line-item vetoes on the budget dealt with health care funding issues – one eliminated “bonus” funding of $30 million each year to nursing homes that met certain quality benchmarks and the other removed language blocking a state expansion of Medicaid.

Kasich’s veto message said no new data has been presented to justify an increase in payments to nursing homes.

But Peter Van Runkle, executive director for the Ohio Health Care Association, which represents more than 800 skilled nursing facilities and assisted living communities, said providers have seen losses of approximately $900 million in Medicare and Medicaid cuts in recent years.

“The quality bonus restores only a small fraction of those cuts, and it is tied to nursing care centers achieving higher levels of quality,” he said.

Jennifer Offenberger, director of marketing and public relations for the Memorial Health System, said the system’s Harmar Place recently received a five-star rating from the Federal Centers for Medicare and Medicaid Services, even as it has dealt with declining reimbursements.

The health system is currently assessing what impact the state budget will have on it.

“In order to provide great care, you need to be able to invest in those people that provide it,” Offenberger said.

Memorial Health System CFO Eric Young said he favors the Medicaid expansion that was part of President Obama’s federal health care law.

“It creates access,” he said. “It creates the opportunity for people to seek care.”

Kasich has opposed the health care law but supported the Medicaid expansion as a way for Ohio to recoup federal tax dollars and assist those in need. Republicans in the General Assembly stripped that out of the budget, but Kasich’s veto, the governor said, would provide more flexibility as the state looks at how to address Medicaid going forward.